Telstra chief executive Andy Penn during an address at the National Press Club in Canberra. Picture: Gary Ramage

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Telstra boss: NBN is making the internet too expensive

by Jennifer Dudley-Nicholson

31st Jul 2019 2:53 PM
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THE head of Australia's biggest telecommunications operator has warned that National Broadband Network prices are "too high," "unprofitable" for telcos, and could force consumers on to the wrong technology.

Telstra chief executive Andy Penn issued the warning at the National Press Club today, slamming the NBN for its "doubling" the wholesale price of broadband in Australia, which he said would disadvantage both broadband providers and, ultimately, consumers.

"Unfortunately, wholesale broadband prices have more than doubled under the NBN and are set to go even higher," Mr Penn said.

NBN chief executive Stephen Rue launched a pre-emptive hit on Telstra’s comments before the National Press Club address. Picture: Hollie Adams/The Australian

"The consequence of this is that it is unprofitable for operators like Telstra to resell NBN.

"Now I do not expect you to feel sorry for a large company like Telstra, but we do need to understand the unintended consequences."

Mr Penn said NBN's high prices could force consumers to look for cheaper ways to access the internet in Australia, and could see them replace more reliable, fast, fixed broadband connections with mobile internet plans, which was "the wrong technology for their needs".

"Ultimately, customers should not have to worry what technology they are using - what they need is the most suitable and economically available technology to meet their needs," he said.

"This is why it is important the economic structure of our industry does not create an unnatural bias toward one form of telecommunications technology over another."

Telstra would not market 5G mobile broadband plans as a replacement for broadband in the home, Mr Penn said, but he warned "one should assume that our competitors will," putting consumers in a bad position.

Telstra cheif executive Andy Penn said NBN’s high prices could force consumers to look for cheaper ways to access the internet in Australia. Picture: Supplied

Mr Penn's call for NBN Co to lower its wholesale broadband prices follows similar messages from Vodafone, Aussie Broadband, and Vocus over the past week.

But NBN chief executive Stephen Rue partly blamed Telstra for its high prices in a pre-emptive statement today, saying the price wouldn't be as high if the company didn't have to pay the telco to access its equipment.

"Let's not forget that the sum of all NBN payments to Telstra was around $2 billion this year," he said. "This has an obvious impact on wholesale prices."

Earlier this month, the NBN revealed more than 10 million Australian homes and businesses were able to connect to its network.

However, documents show just over half of those consumers had actually connected to the network, with 5.6 million using NBN services.